Wednesday, January 02, 2013

Activism and wonkery are the yin and yang

The first element of achieving change is a dissatisfied public that
is able to speak up. In places like China, freedom of speech is
circumscribed and it is not that easy to express dissatisfaction with
the way things are going. In India also, freedom
of speech is under attack, and particularly when it comes to our
problems
of crony capitalism, the threats that we face are dire. But in
some other fields -- e.g. the protests against the events in Delhi --
there are no real barriers to speaking out.

When does democratic outrage genuinely change the republic?

Everyone is against rape. Shouldn't our outrage about rape
immediately yield a world where women are safe? Unfortunately, the
safety of women comes from the functioning of the complex machinery
of laws, police, lawyers, judges, courts. To fix the problem, we
have to modify this machinery.

The workings of government are a vast clanking machinery with many
moving parts. When you see something going wrong in the outcomes, it
isn't always easy to diagnose the problems of objectives,
accountability, and organisation structure that are inducing the
problem, and envisioning the change that is required in order to
solve the problem. The protester is saying I'm mad because the
car does not work. But it takes a skilled engineer to understand
why the car does not work and how to fix it.

Sometimes, I see activists who are revulsed at the workings of the
dark satanic mills; who emphasise the protesting and downplay the
fixing. There is sometimes a mix of frustration and reverse snobbery
in play. I think that at its best, democratic society needs both:
the activism (that puts a searchlight on things going wrong in
society) and the wonkery (that actually gets things done). I respect
the work of activists: What is in the searchlight of the public
debate is where we have a chance to break free from the tyranny of
the status quo. But there is no escape from getting engaged in the
plumbing, from figuring out how it works, and coming up with fully
articulated blueprints for change.

It would probably be helpful if protesters could agree on at least a
few main policy changes they would like to see enacted. But we
shouldn't make too much of the lack of specifics. It's clear what
kinds of things the Occupy Wall Street demonstrators want, and it's
really the job of policy intellectuals and politicians to fill in the
details.

This emphasises a two-part process: a democratic process throws up
an opportunity for change, after which the quality of the change
that is obtained depends on the capabilities of the policy
intellectuals and politicians.

While voice is a precondition, it is not enough. The Anna Hazare
movement set out to conquer corruption and achieved nothing. A great
deal of energy was expended, and it generated plenty of television
footage, but it came to nought.

A related example: a while ago, there was a public outcry about
insecticides in soft drinks. I think the activists got it wrong : the
really important target should be the low quality of drinking water,
and not corporations peddling soft drinks. We did not have the policy
intellectuals and politicians who could think about reforming water
and sanitation, who could harness the outrage and get a meaningful
reform program going. Hence, that episode has failed to alleviate the
insecticide in India's drinking water.

Example: London's Great Smog of 1952

The
Great Smog of China by Clarissa Sebag-Montefiore in the
New York Times tells a great story. In 1952, London was hit
by a terrible bout of air pollution, termed `The Great Smog of
1952'. 4000 people died. As she says: Most Londoners who lived
through the Great Smog thought it was simply an especially foggy
period until the undertakers ran out of coffins and the florists
sold out of funeral flowers. This led to a `Clean Air Act' of
1956.

Look at
the Clean
Air Act of 1956. It takes a great deal of thinking to go from
outrage at 4000 dead, to figuring out how to draft this. There are
hundreds of decisions in the 15,389 words of the law, all of which
have complex implications in terms of public administration,
incentives for private households and firms, and so on. It isn't
about setting up a death penalty for emitting smoke: it is about
finding the smallest possible intervention that will get the job
done, and one that is feasible given the implementation constraints
of government.

Example: India and airports

Circa 2002, the airports were a disgrace. There was a public
outcry. The government reacted. Today Bombay and Delhi have decent
airports. Why did this work so well?

The outcome - a high quality airport - is visible and
measurable and monitorable. In other fields -- e.g. criminal justice
system -- it is much harder to know where you stand, which reduces
accountability.

MPs and ministers use the airport. In contrast, with the criminal justice
system, they have opted out of public systems. In a problem like corruption,
many might actually want the status quo to continue.

Under these circumstances it was possible for the political
leadership to achieve airports, and make some in the elite (and
themselves) happy, at no cost to their conventional focus on welfare
programs and at no cost to anyone other than a few unhappy employees
of AAI (who did not even lose their jobs).

There was the difficult problem of building regulatory capacity at
AERA. The leadership in AERA of the early
years did
things better than most infrastructure or financial regulation in
some respects. My personal experiences with AERA in recent months have
left me enormously impressed at the capabilities in the
organisation. But at the same time, the problem that they face is a
relatively simple one. To
use Pratap Bhanu Mehta's delicious
phrase, building airports in Bombay and Delhi was not a wicked
problem.

Example: London's Big Stink of 1858

Going much further back into time, London went through the `Big
Stink of 1858', where the Thames was clogged with human waste. In
the summer of 1858, within 18 days, Parliament drafted and enacted
legislation that, in time, made the Thames one of the cleanest rivers
of the world.

That's a remarkable story. As an illustration of the firepower
amongst the policy intellectuals: they had Michael Faraday working on
the problem! We don't have a Michael Faraday in our midst; we have yet
to match the capabilities of the UK circa 1858.

Some areas are harder than others

Drawing on work by Lant Pritchett and Michael Woolcock, we should
apply three tests to understand when doing something in government
is hard: (a) Does a public service have a large number of
transactions? (b) Do front line workers have discretion? (c) Are
the stakes high?

How do good countries grapple with the problem of constructing a
criminal justice system? As an example,
the John
Jay College of Criminal Justice, at the City University of New
York, works in this field. It has over 1000 academics working on
this one field! In this one field, they have placed more than 2x the
number of academics across all fields at IIT Bombay.

There are thus two reasons why making progress on the criminal
justice system is hard. Unlike the airports example, these are
difficult areas: Large number of transactions, front line civil
servants have discretion, and the stakes are high. And unlike the
partial success of the equity market reforms, we in India have not
laid the foundations in terms of analysis of problems,
consensus-building, and construction of key individuals that can
play leadership roles in the change.

Example: India's stock market reforms

Financial regulation is a wickedly hard problem. There are a large
number of transactions, front-line workers have discretion, and the
stakes are sky-high. If all regulation and supervision were done in
government, it would be truly hard to make things work, particularly
in India.

Hence, there is a neat two-part separation of the work. The
exchange is a unique private body that does regulation and
supervision. In the bad old days, the exchanges in Bombay and Calcutta
were riven with conflicts of interest and did not do a good job of
supervision. This gave us stock market crises in 1992 and 2001, which
had large-scale consequences for the country. Calcutta Stock Exchange
was a small player in 2001, but the problems there were big enough to
matter to everyone.

There was an outcry. This led to a dramatic
program for change. A new governance model was put into place at NSE
and BSE, where there is a three-way separation between shareholders,
managers and trading members. The managers, who perform quasi-State
functions in supervision, have no shareholding nor stock options. It
worked.

Why did it work? It is important to look back into time. Right from
the 1980s, ideas for reform had been tossed about. The G. S. Patel
Committee, in 1984, had many of the key ideas of the following 20
years in its report. A little noticed feature of the G. S. Patel
Committee report is in the preface, where the research support of a
R. H. Patil from IDBI is acknowledged. Many of the names that figure
in the story of the Indian stock market in the following 20 years were
part of the G. S. Patel Committee; as an example R. H. Patil was the
founding CEO of NSE.

As a consequence, in 1992, when the crisis came, there were people and ideas in the
system that were ready to respond. The knowledge and consensus that
was available then carried us half the way.

Through the 1990s, there was a process of analysis and thinking
about policy alternatives. There was a view on how change should
proceed, and the conservatives were able to stall it. In the listless
years from 1996 to 2001, a lot of hard work got done on fully thinking
through the next batch of reforms. When, in 2001, the next crisis
came, the Ministry of Finance was able to access well-developed ideas
and people that drove the next batch of change.

From the viewpoint of politicians, all change is risky. Fear of the
unknown feeds into inertia: Why suffer a political cost for sure,
offending the status quo, for a reform that might not work? We
improve the probability of a reform being attempted when two
properties hold: (a) We have a fully articulated blueprint for
change, which is backed by high quality thinking and evidence, and
(b) People who can staff the reform effort are available.

From 1980 to 2000, the committee process created a working
consensus on what was needed to be done, took new ideas from heretical
to mainstream, and built individuals who went on to play leadership
roles in achieving the change.

That's the good part. And yet, in some ways, this has started
turning into a failure
story of sorts. After 2001, when the big changes fell into place, the
policy community stopped focusing on the stock market. It was felt
this is a solved problem. There was a lack of institutional memory
about what had gone wrong in 1992 and 2001. The three-way separation
between shareholding, management and securities firms was not
remembered, and has
been undone. We
are going back to dangerous times.

Why has the wonkery been so weak in India?

Why are the policy intellectuals and politicians of India so weak
on the questions that matter for India's future? There are two
elements of an explanation. The first is money.

In India, we spend roughly 1% of GDP on research in four fields :
defence, nuclear engineering, the space program and agriculture. But
all these fields are of second order importance when compared with the
main story of India's future, which is at the intersection of
politics, economics, law, ethics and philosophy. In these areas, we
are spending 0.001% of GDP. This ratio of 1000:1 of expenditure
between these areas is inappropriate. As a consequence, we are failing
to grow the intellectuals and university departments in these
fields.

This matters for the wonkery. It also matters for the activism. If
we could do better on the education that millions of people get in
college, we could have a much more thinking citizenry which could be
much more effective in mass political action. Our failures on
universities are limiting the feedback loop through which growth
should feed higher education and should feed back into better
politics.

To some extent, the two problems are related. India has offered
little by way of career paths in studying India, and getting engaged
in the project of building the republic. The development economics
establishment, in contrast, offers a full career path: with Western
aid agencies, NGOs, the World Bank, academic development economics,
and much nourishment from a socialist government. This gives strong
incentives for people to focus on poverty, inequality and welfare
programs. This has enfeebled the wonks, for the big questions that
India now faces are not poverty, inequality or welfare programs.

Conclusion

As Sunil Khilnani says, the most important task for each of us in
India is to get involved in politics, in the sense of taking interest
in how the State functions and undertaking actions small and large
that will prod it towards better functioning. We have traditionally
felt that the greatest threat that we face is that of an apathetic
citizenry.

It now appears that we have a more active and
participatory demos and this is a great thing. We are seeing
profound changes in the world of activism. New technologies are
reducing the cost of mobilisation. Millions of people have joined
the conversation. We find that they care about core public goods and
corruption. The voice of the people is negating the socialist claim
of all these years, that what people care most about is garibi
hatao and inequality. These are great developments.

But while this is a necessary element for a well functioning
republic, it is not sufficient. The surge of policy involvement by
citizenry is not getting translated into action on a commensurate
scale. The constraint is the weakness of the elite. We lack the
policy intellectuals and politicians who are able to pursue wicked
problems, diagnose what is going wrong, and articulate a tangible
program for change.

The policy intellectuals and politicians are missing in action on
the questions that matter. The bulk of the existing policy
establishment is focused on poverty, inequality and welfare
programs. As Shekhar
Gupta has emphasised, the ruling ideology among most politicians
is ossified in the thought process of the 1970s. India has moved on,
but our political ideologies haven't.

Intellectuals are the yeast that make a society rise. Our
under-development in intellectual capacity limits our ability to
translate a moment -- like the anti corruption movement -- into
change. In addition, there is a danger that an irate public that is
weak on political philosophy will settle for cartoonish solutions like
Lok Pal or Naxalism or a death penalty for rape.

The wonkery is intellectually bankrupt today. The policy
intellectuals and politicians who are able to reshape themselves to
fit the needs of India from 2013 to 2038 will matter. A greater
conversation between the two cultures will also matter greatly, with
each cross-fertilising the other. Activism and wonkery are the yin
and yang that must work together to build the republic.

26 comments:

The problem is many fold here, even the basic system of democratic election has flawed in these many years..if we talk with an example than a minister from some place in UP becomes cabinet minister for coal and mines ..he has no experience to this field even don't know how the coal has been extracted and comes to government quota etc. ..while he or she tries to learn it all , its already a cabinet reshuffle time and the same person now handles public safety department...why in private firms HR people needs people with same domain experience to handle higher posts? because it provide opportunity for the person to implement his or her policies as soon as possible and not to take time to understand it from scratch we need intellectual people in the political system so that policies get formed and implemented fast...by the way very nice article and solid commentary..keep writing

Priyank, this is an issue in all Westminster-type democracies, where cabinet members are drawn from the folks who won elections. In contrast, in the US, the cabinet is recruited with a focus on expertise. I think we have to treat this constraint as a given, though it can and should be debated in the context of writing a new Constitution.

What a fantastic article! I wonder if there's the potential for a book on stock market reforms? Michael Lewis would have found a way to make it a bestseller? :)

I'm glad that you identified the fact that politicians couldn't exit the system, when listing reasons for why airports were improved (Point 2 there). There's also the fact that they need to attract foreign investors (ie; bakras) and hence couldn't avoid improving the airport infra. The airport to five star hotel economy and infrastructure is on a completely different plane (no pun intended). However, I feel that you have neglected this reason in your subsequent discussions.

For example;

"Drawing on work by Lant Pritchett and Michael Woolcock, we should apply three tests to understand when doing something in government is hard: (a) Does a public service have a large number of transactions? (b) Do front line workers have discretion? (c) Are the stakes high?"

Shouldn't there be a (d) can the elite and political class get the service elsewhere/outside the country, or in other words, exit the system for that service?

This exiting the system business (especially in the massive scale) might be unique to India.

Likewise, on this:"Why are the policy intellectuals and politicians of India so weak on the questions that matter for India's future? There are two elements of an explanation. The first is money.... The second problem is development economics."

The third is that the intellectuals and politicians have all been able to send their kids abroad to make up for the shortcomings in the domestic education system, and likewise for healthcare. Again, exiting the system. Another example on this theme: I've heard anecdotes of politicians refusing to go to a doctor because he is a "quota doctor". If they had to rely on domestic, public hospitals, they would at least think twice about the effect of reservation on healthcare quality.

So, the question is what to do about this 'exiting the system' issue. Ofcourse, if I was thinking like Kejriwal, I would force politicians to use the public service, which would be another example of a cartoonish solution. But, I wonder what could actually be done about this...

Vivek, what Lant and Michael said in their World Development article was: Can we identify When it is hard to do something in government?. Their idea was: Focus on two issues: Do you have a lot of transactions? Do front-line workers have discretion? When the two come together, it's hard.

You're on a somewhat different point. You're saying: "When will the elite dig in and fight with a hard problem?" That takes us to exit. It's an important issue, but it's different from saying something is hard.

I understand this now. The paper makes a distinction between cases where the govt doesn't want to solve the problem (for whatever reason) vs where they want to, but its a hard problem and then proceed to discuss when problems are hard, etc.

So, the exit issue may not be an add-on criterion, but its a prerequisite in the sense that the politicians/elite/bureaucrats need to first of all own the problem and commit to it. You have mentioned that the govt needs to have better focus on public goods and commit to them, in terms of funding, etc. Intelligentsia need to focus on these issues instead of development econ, etc. So, I guess that commitment is a prerequisite before we can even begin to deal with the hardness of the problem.

This article is so relevant because middle class people and Kejriwal, etc come up with 'cartoonish' solutions to wicked problems. But the people will very likely be assuaged by an improvement in the prerequisite issue of commitment level from the government. The problem is that the absence of clear articulation by the govt on their commitment and acceptance of responsibility creates a vacuum for people like Kejriwal to fill. We should atleast have the understanding across govt, elite, etc to solve this non-wicked prerequisite problem of focus on public goods. I guess that is where your welfare vs public goods argument comes in, and what buys votes, etc.

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On the hardness of problems:

The hardness of the problem should not be a cop out for the govt, especially when the funding level is low. Its not sufficient to say something is hard. The question also should be how poor are we on the issue. There might be some minimum improvements that can be agreed upon by consensus, especially since we have only begun to increase the commitment level.

Its interesting that the 2002 paper from Pritchett and Woolcock mentions that intensification, amputation or policy reform have often failed as a response to hard problems. I wonder if your R.H.Patil case is an example of policy reform measures which may not apply to other hard problems? Although strong police chiefs have been shown to be effective. I also found it interesting that Kejriwal proposes an intensification solution, much like the govt does itself. There doesn't seem to be much difference between them. Although, some policy intellectuals don't quite see this similarity and are contemptible of Kejriwal vis-a-vis the govt, when funnily, they are quite the same in their proposed solutions. Its not like Manmohan Singh is coming out and saying JLP is a bad solution, we instead need to do X. He's just arguing for his version of the JLP. Needles to say, thats quite pathetic.

Lastly, the paper is from 2002 and surely we should be able to work from the conclusions of the paper to devise better ways of analyzing solutions across countries. And, there might well be such follow up work done already. This could just be a data science problem across countries, and a simple one at that (not a hard one!). Technology could be used to reduce or eliminate much of the problems due to having a lot of transactions and front line workers having discretion. This wouldn't even need to be cutting edge technology. In 2002, we may not have had the technology, but now we probably do.

In the last paragraph above, you say that in some cases, the use of computer technology can be used to convert discretion-intensive problems into non-discretionary problems. I agree! A version of this is in: Improving governance using IT systems by Ajay Shah, page 122-148, in `Documenting reforms: Case studies from India', edited by S. Narayan, Macmillan India, 2006. PDF at: http://www.mayin.org/ajayshah/PDFDOCS/Shah2006_big_it_systems.pdf

All countries have some kind of politics or the other. Politics, as in rival groups seeking to control the apparatus and benefit from it, is a universal phenomenon.

In a few places in the world, there was thinking of a completely level which illuminated and reshaped this process. This doesn't always happen, and we in India shouldn't take it for granted. But it can happen. Our defining question is: Is India going to rise into prosperity and success? For this, a whole new world of ideas has to come about, that interacts with politics and reshapes it. If we fail to do that, we'll just be a Philippines or Indonesia or Argentina.

E.g. compare the typical African nation that got freedom from colonialism versus India in 1947. What was the difference? It was in the intellect of the freedom fighters. We could just have been grunts who picked up guns and shot the British. Many in India advocated such paths. But we did differently? Why? It was about imagination and ideas.

"The central theme of this paper is solving puzzles of governance using modern information technology; not IT for its own sake."

"Often, an innovative solution will depart from “international best practice”."

"Solving puzzles in governance through IT systems compresses a multi-decade process into a few years, and fuels high economic growth."

This paper feeds back into the 'hard problem' argument. Maybe the problems are not that hard given the evidence from successful IT-led transformations? Although thinking through the transformation of a hard problem to an easier one using technology may itself be hard. :)

The govt should institute a huge research department to identify just such problems and solutions using IT systems? Maybe, they have done so already? Seems like if the govt should do anything at all, it should be this. What one senses though (going by the general feeling among policy intellectuals) is that maybe they are going the opposite way and the belief in this is not as strong as it should be?

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"In a few places in the world, there was thinking of a completely level which illuminated and reshaped this process. This doesn't always happen, and we in India shouldn't take it for granted."

The US was founded at the end of the Enlightenment. I wonder if that is to be looked upon as a luck factor that led to the US founding principles being as good as they were? Give or take a century and maybe the US constitution wouldn't have had such strong words for individual liberty?

And, looking at our founding fathers, and the flaws in some of our founding principles, I wonder if the problem at independence was the same as the problem today - lot of activism, insufficient wonkery?

I think non-economists might misunderstand the term "development economics". And, I'm unsure of what it means 'exactly'. Perhaps, there can be a short definition + clarification (that the criticism does not imply being anti-development) on your website to which you can link to?

One problem I see with the law-making process in India is that apart from a very high level policy declaration of intent, there is very little by way of next-action areas of work which should be covered in the enactment. It is left to the executive to convert the law into regulations, programmes and projects, which together should finally change the situation on the ground. Many a time, the executive lacks the expertise to design these elements and allocate resources optimally. There is also no evaluation of laws passed and their impact.

Many members of the Indian bureaucracy have been able to attend one/two year study programmes on public policy in leading universities abroad for the last few years, thanks to the generous government funding. Thus, the policy framework ought to start improving, if only the stakeholders start engaging in an open dialogue. This will require a cultural change within the bureaucracy.

Dear Nandu, Agree completely. Most Indian laws are badly drafted, particularly those that were written in recent decades. I hope you will be pleased at the level of thought and care that will go into the drafting of laws in the Financial Sector Legislative Reforms Commission.

Ernest Hemingway was an intellectual. Robert Jordan was not an intellectual. A wonderful man, a hero, someone to admire, but not an intellectual. A policy intellectual is someone who thinks about the world and thinks about how to fix it. Robert Jordan was a policy practitioner :)

The word "intellectual" embeds praise. Hence, anyone who calls himself an intellectual is a wannabe.

Sir, I think there is undue focus on intelligent policy making, when the real issue is the Integrity of the State. We know many of the solutions, but the problem lies in their implementation. Of course, politicians are expected to respond to the ongoing changes,because it would have electoral implications. So what's holding them back:1. 'First past the post' system of election. Enough people have been kept poor for decades, and their dependence on state handouts creates potential for 'cash for votes' deals. 2. Majority of the lawmakers will either lose power or end up in jail, if criminal justice system is reformed, especially because, of late, more and more criminal elements have 'forward integrated' into the safe haven of politics. This is a huge barrier to change. The ultimate solution to this stalemate has to be a deal that provides immunity for past sins, in return for implementing progressive reforms. The problem is: State of the Politics, not Policy.

We need intellectuals to think about (say) first past the post elections. It was the failure of the intellectuals, at the time we drafted the Constitution, that we got into the problems that we face. We had a fabulous opportunity, in 1947, to put the nation on a sound path. By and large, the capabilities of the intelligensia (which dominated the drafting process) were weak. We now need to do better on the thinking.

Yes, reforming the criminal justice system is difficult. That does not mean it can't be done. It will require thinking and strategising. There is popular outrage: Can it be channelled into achieving change?

Are democracies capable of meaningful change? In my opinion, the answer is Yes, when the people have the resolve and when the wonks have the nuts and bolts worked out. When these two come together, we can get far-reaching change.

The state of politics, in my book, is policy. Politics is itself the outcome of a bunch of texts: the Constitution, the IPC, the budgeting system, etc.

Mr. Shah, I am very impressed by the points you have made. The discourse in the media has been dominated by emotions and tough-talk and little good has come out of it.

But what I wish to ask you is this: if we point to the lack of meaningful analysis by intellectuals in this case, the same could be said of every other problem facing the nation too. The burden of analysis for the entire country surely cannot be made to fall on a few bright minds amongst us.Furthermore, if we need more public intellectuals, how are we going to get this to happen? This would probably require substantial educational reforms, which if we were capable of formulating and implementing, we would never be in this position as a country today.So, to me, a possible solution seems the intellectualisation of young and middle-aged educated Indians in this country. I mean working people with ordinary lives, who are actually the most affected by the misgovernance of our country. Of course people will make their own choices, but we need to increase their exposure to the fields of politics, economics, philosophy, etc. How can we achieve this? What are your views on the appropriate actions in this respect?I would also like to state that I am just a young IT graduate, working in the networking field, but I share the hopes and aspirations of millions of Indians and I feel that responsible, well thought-out opinions like yours must be valued if we are to get any meaningful solutions out of this. I have been following your blog for more than a year now. Thanks.

The burden of analysis for the entire country surely cannot be made to fall on a few bright minds amongst us. But does the burden of finding the new physics that will make space travel possible not fall on a few bright minds amongst us? :)

Furthermore, if we need more public intellectuals, how are we going to get this to happen? I think it's truly hard. We are doing very badly on both supply and demand for policy advice. I don't see this changing quickly.

So, to me, a possible solution seems the intellectualisation of young and middle-aged educated Indians in this country. I agree! The protests of the last two years are a huge step forward, in taking the middle class from sullen resentment about a socialist India to a middle class that is speaking up. But the need of the hour is to improve the quality of the conversation.

Most college education in India is pointless. Broad intellectualisation requires reading books about the world, reading longform articles in the Western press, and reading+participating in blogs such as this one.

I was reminded of the same point made by Shourie a while ago. The role of elites in society was very well articulated by him. The quality of elites is an outcome of the quality of institutions and in turn the quality of society and culture we have.

I am hopeful that college education in India will be irrelevant due to easy access to online courses. But, I don't know how far one can get by watching videos. We are losing the habit of reading books, which was anyway a less than prevalent habit in India.

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